Broadcom Did All It Could to Lift Investors' Animal Spirits

Broadcom Inc. (NASDAQ: AVGO) reported fourth fiscal quarter 2019 results after markets closed on Thursday. The chipmaker posted adjusted diluted earnings per share (EPS) of $5.39 and net revenues of $5.78 billion. In the fourth quarter of 2018, Qualcomm reported EPS of $5.85 on revenues of $5.44 billion. The consensus analysts’ estimates called for EPS of $5.35 and $5.73 billion in revenue.

For the full year, Broadcom reported EPS of $21.29 and revenues of $22.6 billion compared to EPS of $ 20.82 and revenues of $20.85 billion. Analysts were looking for EPS of $21.27 and revenues of $22.55 billion.

During the quarter, Broadcom completed its acquisition of the Enterprise Security business of Symantec. This new business operates as the Symantec Enterprise Security division of Broadcom.

In its outlook for the 2020 fiscal year ending on November 1, the company expects to post sales of $24.5 to $25.5 billion and adjusted EBITDA of $13.5 to $14 million. Analysts have forecast first fiscal quarter EPS of $5.43 and revenues of $5.73 billion. For the full fiscal year, the consensus estimates call for EPS of $23.26 and revenues of $23.79 billion.

CEO Hock Tan said:

Looking to fiscal 2020, we remain well-positioned across our technology franchises. We continue to believe that our core semiconductor business is bottoming and will return to year over year growth in the second half of our fiscal year. In addition, we expect to benefit from the integration of the Symantec Enterprise Security business into what is otherwise expected to be a stable infrastructure software segment in fiscal 2020.

CFO Tom Krause added:

We achieved record profitability in fiscal 2019, including free cash flow of over $9 billion, despite a challenging market backdrop for our semiconductor solutions segment. As a result, we are raising our target dividend by 23 percent to $3.25 per share per quarter for fiscal year 2020.

The current dividend payment is $2.65 per quarter, a yield of 3.36%.

Broadcom stock traded up about 0.5% in Thursday’s after-hours session, at $329.40 in a 52-week range of $230.33 to $330.60. The 12-month consensus price target on the stock is $325.89.